Is Bitcoin Skiing Downhill?Bitcoin prices continue to drop and the trend signals a bearish price action. Can Bitcoin rise again or the sentiment remains negative?
The Winter Olympics are over for another four years. Athletes in svelte ski suits (or Marvel outfits – in the case of the American team) thrilled everybody, with some fairly breathtaking maneuvers down the snow-covered slopes of PyeongChang, in South Korea. The times in the giant slalom event were crazily fast. Zipping between the flags and defying gravity, to swing one way or the other, whilst hurtling down a hill takes nerves of steel. And practice. And planning.
However much you twist and turn, your ultimate direction – in any form of skiing – is down. Even the youngsters, on the half-pipes, with their snowboards followed the huge jumps with huge falls, eventually running out of steam at the end of their run – gravity is an inevitability in the Winter Olympics it seems.
Technology can help to overcome some of the forces at work – carbon fiber skis cut through snow and ice far better than wooden skis – and the sleek, designer overalls – cut down wind resistance and help gain the hundredths of a second which can mean the difference between a gold and a silver.
In the same way – we can use the technology of electronic indicators, and clever projections, to help us try to minimize losses, and increase gains – but we cannot deny or overcome trends. If the market is moving up – it is moving up – if it is moving down – well, you see what we mean …
This is where we find ourselves right now. The trend is obvious. We see two ways this can play out …
The first is a retest of the lows of February. The chart is forming, what may become, a classic “double bottom” pattern. This is a powerful reversal signal – by this, we mean a reversal of the trend. The trend is down, or negative.
Here we can see the trend clearly since Christmas – except for the bounce in February, and the slight retrace last week – this trend is obviously down.
At 1) and 2) the price formed a “double top” – and looks to be shaping an “M” pattern with a “double bottom,” at 3) – and possibly 4).
We need to be aware that the price may well bounce higher from the second low of around $6,000 – and, because of the power of the signal, the rise – if this happens – will be rapid …
The second scenario is a rise through the current resistance level – and psychological barrier at $10,000.
Once through this barrier, at 2) the price may rise from the low, at 1) back up again, to 3) once buyers get onboard again.
It has been a scary ride for the new and amateur investors, who make up the bulk of Bitcoin buyers – there are very few institutional holders. This has advantages and disadvantages.
On the one hand, there are no “high-frequency traders” here – on the other – many Bitcoiners are first-time investors, with no experience of falling markets, risk strategies, and stop losses. This means many – having bought at around the $20,000 mark – have lost considerable sums of money. This will make them extremely reluctant to get back in the ring.
If Bitcoin does follow the first scenario (and this is looking more likely by the day) there will be a lot of panic selling and anguish – the exact time the professional investors will step in to mop up the bargains.
Noble Gold specializes in IRAs and 401(k) rollovers through precious metals and cryptocurrencies investments.